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News

Submission to Energy Review

Industry calls on Prime Minister to commit to generating a fifth of UK electricity from renewables by 2020

Thursday 13 April 2006

The British Wind Energy Association (BWEA) today presents the Prime Minister and Malcolm Wicks, Energy Minister, with new evidence on the delivery of wind and marine power and calls on them to commit the nation to generating 20% of its electricity from renewables by 2020.

According to BWEA’s submission to the Energy Review, by 2020, wind power both on and offshore, wave and tidal stream and small scale wind turbines can generate 21% of the UK’s projected electricity needs. On and offshore wind will play the leading roles, generating respectively 8.8% and 9.4% of projected UK electricity supply, with an additional 2.1% coming from wave and tidal power and up to 0.7% from micro and mini wind turbines.

These technologies alone could have a combined capacity of 28,000 megawatts (MW) in place by 2020, generating 78 terawatt hours (TWh) of electricity, equivalent to the needs of two thirds of all UK homes. If displacing gas-fired electricity generation, this would reduce gas imports by 14.6 billion cubic metres annually and avoid 32 million tonnes of carbon dioxide emissions, whilst delivering major economic benefits to the UK of more than £16 billion in the period to 2020 from construction and operation of the potential onshore and offshore wind capacity.

While BWEA’s research indicates that by 2010 around 8% of the country’s electricity needs will be met by renewables, primarily from onshore wind, it also shows that ‘business as usual’ progress, driven by the current support mechanism of the Renewables Obligation (RO) will not be sufficient to drive a major roll out of offshore renewables, without which we will fall well short of the 20% potential identified by the Association.

A contribution of 20% is not only deliverable, as identified by BWEA, but can be accommodated on the grid without reduced reliability, as noted in a new report released by the UK Energy Research Centre last week*. Their comprehensive assessment of the evidence on intermittency confirms that variable generation from sources such as wind do not compromise system reliability and that while some changes to operation and additional investment in backup capacity are required, these are limited and quantifiable, and easily achievable in the 2020 timescale.

BWEA is therefore calling on Government to take action in five specific areas:

• To turn its current ‘aspiration’ for 20% of electricity supply from renewables by 2020, into a firm Government target.  This is essential to provide strong long-term investment signals and to maintain confidence in the sector

• To extend the Renewables Obligation to 20% by 2020 to provide the additional financial resources to deliver the 20% target. Extending the Renewables Obligation from its current top level of 15.4% in 2015 would increase its overall cost in 2020 from £1.9bn/yr to £2.5bn/yr, based on today’s prices. For an average domestic consumer, this would mean an extra £8/year on top of the existing commitment of about £20/year for the 15.4% Obligation, or an additional rise of about 2% on top of the 6% pre-committed rise on a typical household bill of £400/year

• To immediately resolve policy issues on offshore wind and marine renewables to ensure they are deployed en masse to meet more than half of the 20% by 2020 target. This may require either additional Government financing outside of the RO or an evolution of the RO to direct additional resources to these key technologies

• To maintain a robust and positive planning framework throughout the UK and take action on current delays in decision making which are in danger of compromising the role of onshore wind in meeting Government's renewable energy targets.  A combination of financial and policy mechanisms and communication initiatives should be introduced to incentivise prompt decision making at both the national and local level

• To progress with breaking down non-economic barriers, in particular the grid bottleneck which must be resolved in time to allow onshore wind to deliver the shorter term 2010 target, and all the marine renewables to deliver on longer term objectives in 2020.

BWEA believes that maintaining wind’s good progress onshore and delivering on our vast offshore renewable potential will be a key test of the Government’s resolve to set the UK on the path to a low-carbon future. If no extra resources are provided for offshore wind, wave and tidal power or the RO is not evolved to direct more resources to them, these essential technologies will not be delivered in the quantities required and we will fall well short of our 20% by 2020 potential.

BWEA CEO Marcus Rand said:

“Malcolm Wicks, when he launched this Review, made clear he wanted evidence not opinions on our energy options. This is the most extensive piece of work undertaken on the deliverability of wind and marine renewables and should provide him and the Prime Minister with the confidence to commit this nation to generating at least a fifth of our power needs from renewables by 2020. The arguments for doing so are compelling; huge public support, significant carbon reduction, increased energy security, and affordable power delivered quickly by a dynamic and innovative industry ready and willing to deliver.”  

BWEA’s full submission including all the research undertaken by the Association can be found at www.bwea.com/energyreview.

Notes to editors:

About BWEA’s submission:

• The key findings of BWEA’s work for the Energy Review are that wind energy, on and offshore, and wave and tidal power will be providing the bulk of the UK’s renewable electricity growth in the period to 2020, with potential installed capacities of:
  • 12,500 MW of onshore wind
  • 11,500 MW of offshore wind
  • 3,000 MW of marine renewables
  • up to 1,200 MW from micro and mini wind turbines
• This level of installed capacity would generate an annual average of 78 TWh of electricity, equivalent to the needs of two in three UK homes, and if displacing gas-fired electricity generation would reduce gas imports by 14.6 billion cubic metres annually, equivalent to 324 tanker shipments of Liquefied Natural Gas, and avoid the emission of 32 million tonnes of CO2.
• The installation of 12,500 MW of onshore wind and 11,500 MW of offshore wind would result in investment of over £16 billion in the UK in construction and infrastructure works, including £740 million in business rates, £797 million in landowner income (including £212 million to the Crown Estate) and some £195 million in community income.
• While onshore wind is leading the way in delivery of renewables capacity, with some 6,000 MW able to be installed by 2010, equivalent to almost 5% of UK electricity supply and representing almost half of the Government’s targets on renewables for that year, progress offshore is not as rapid as had been hoped, with a maximum of 2,000 MW possible by 2010. However, with a new policy impetus, offshore wind can deliver up to 8,000 MW by 2015, equivalent to 6% of projected electricity supply
• The renewable contribution of 20% in 2020 is deliverable, but the key to unlocking this potential is getting the financial mechanism right for emerging as well as existing lower-cost renewables. If no extra resources are provided for newer technologies or the RO not evolved to direct more resources to them, offshore wind will not be delivered in the quantities required to establish the sector and attract investment in the supply chain that will bring costs down. Should offshore wind not deliver, then it will be difficult for investors to show confidence in Government providing the right framework for the nascent technologies of wave and tidal stream.

Figure below shows TWh contributions from wind, wave and tidal power in 2020, taken from full report:

About BWEA:

• The British Wind Energy Association (BWEA) is the trade and professional body for the UK wind and marine renewables industries
• Formed in 1978, and with over 310 corporate members, BWEA is the largest renewable energy trade association in the UK
• In 2004, BWEA expanded its mission to champion wave and tidal energy and use the Association's experience to guide these technologies along the same path to commercialisation
• BWEA’s primary purpose is to champion the UK wind and marine renewables industry.

About Government policy and targets:

• The UK Government launched its Energy Review consultation on 23rd January 2006. The 12 week consultation sets out the UK’s energy challenges and considers all aspects of our energy system including both energy supply and demand. The consultation document "Our Energy Challenge: securing clean, affordable energy for the long term" is available at www.dti.gov.uk/energy/review/
• The Renewables Obligation (RO) is the primary legislation in the UK to deliver the Government’s targets on renewables. The RO and associated Renewables (Scotland) Obligation came into force in April 2002, and require power suppliers to derive a specified and increasing proportion of the electricity they supply to their customers from renewable energy sources. Originally set at 3% in 2003, this now stands at 6.7% in 2006/7, rising incrementally to 10.4% by 2010 and 15.4% by 2015. See www.dti.gov.uk/renewables/renew_2.2.htm
• Eligible renewable generators receive Renewables Obligation Certificates (ROCs) for each MWh of electricity generated. These certificates can then be sold to suppliers, in order to fulfil their obligation. Suppliers can either present enough certificates to cover the required percentage of their output, or they can pay a ‘buyout’ price of price of £32/MWh for any shortfall. All proceeds from buyout payments are recycled to suppliers in proportion to the number of ROCs they present.
• The Government has a number of targets and obligations on carbon dioxide emissions, including:
  • Reducing the UK's CO2 emissions by 20 per cent from a 1990 baseline by the year 2010
  • Putting the UK on a path to reduce CO2 emissions by some 60 per cent by 2050, with ‘real progress’ by 2020, as recommended by the Royal Commission on Environmental Pollution (The Energy White Paper 2003)
  • As part of the Kyoto Protocol, the UK has also agreed to reduce greenhouse gas emissions by 12.5 per cent below 1990 levels by 2008-2012.
  • Reduce greenhouse gases by 15-30 per cent by 2020 from 1990 levels as proposed by the European Union.

* The Costs and Impacts of Intermittency: An Assessment of the Evidence on the costs and impacts of Intermittent Generation on the British Electricity Network, UK Energy Research Centre, April 2006.
www.ukerc.ac.uk/content/view/258/852